The Great Depression Flashcards
What is a ‘Bull market’?
Means the Stock Market is rising and investor sentiment is confident, further encouraging other investors to buy. Generally when the Stock Market is ‘Bullish’ the economy is strong and unemployment is low.
What were the factors that contributed to the Great Depression?
-Overproduction
-Banking system
-Wall Street Crash
-Unequal distributed wealth
-Laissez-faire
-Confidence and media
Why was the decline of the agricultural sector a contributer to the Great Depression?
After WW1 there was a reduce in demand and increase in overproduction. Farmers received lower prices for produce therefore less income to buy goods.
When did the Wall Street Crash occur?
29 October 1929
Define stocks
Units of ownership in a company. By buying stocks you buy part of a business and receive a percentage of the profits. If the profits fall, your shares are worth less. If the stocks rise, your shares are worth more. If you sold your stock when it was worth less than you paid for it, you would lose money
What was the Wall Street Crash?
When share prices plummeted causing people to sell their shares causing the prices to no longer rise leading to a panic selling of shares
What did Herbert Hoover believe surrounding government intervention?
He felt that too much government intervention in economic matters could damage American ideals of individualism and self reliance
What did he do to try and encourage economic growth in the beginning of the Great Depression?
He championed private public cooperation and volunteerism
Define volunteerism
A system where people participate in activities to benefit the community with no financial reward
How did Hoover try to ‘talk up’ the economy?
He met with business owners and encourage them to maintain wages, prices and investment
What was done to try and stabilise the banking industry and employment?
-Reconstruction Finance Corporation loaned money to failing banks and railways
-Federal Home Loans bank system offered loans to homeowners threatened with disclosure
-$2 billion set aside for public works projects such as road building
In July 1932 what event caused Hoover’s image to be further destroyed?
Thousands of unemployed WW1 veterans converged on Washington requesting their war service bonus early from the set time being 1945. Hoover refused to meet with them so federal guards ended up attacking the ‘Bonus Army’ in an attempt to move them killing multiple people
What did Franklin Delano Roosevelt promise Americans during the 1932 elections?
The ‘New Deal’
What was Roosevelt’s first step, what act was rushed through Congress to stabilise the economy and what did further legislations do?
-A ‘bank holiday’ when banks closed in an attempt to quell the panic withdrawals
-The Emergency Banking Act
-To stop banks from using depositors’ money to buy and sell stocks, protecting their savings
What was Roosevelt’s objective and what was one way he did so?
-‘the only thing we have to fear is fear itself’ he wanted to calm people and restore their confidence in the economy
-Addressed the people directly through radio broadcasts known as ‘fireside chats’
